The U.S. District Court for the Western District of Missouri has permanently barred Aric Elliot Schreiner and his company, Columbia CPA Group LLC, from promoting and participating in tax schemes involving charitable remainder annuity trusts (CRATs). The court also ordered Schreiner to repay $400,000 in “ill-gotten gains.” This follows related injunctions granted against several other defendants who were involved in similar schemes.
The government sued Schreiner, his company, and five other defendants to stop them from promoting the CRAT scheme. Last year, the court permanently barred Rhonda Eickhoff, John Eickhoff Jr., and Hoffman Associates LLC from organizing, promoting, selling, or marketing a tax scheme involving CRATs. The government estimated that at least 70 CRATs were involved, resulting in $40 million of unreported taxable income and $8 million in tax revenue losses.
The scheme encouraged taxpayers to contribute property—often real property—to a CRAT, inflating the property’s basis on tax documents. After the property was sold, the proceeds were used to buy an annuity, with payments either not reported or reported as tax-free distributions from the CRAT. Abuse using CRATs was listed as one of the “Dirty Dozen” tax scams of 2024 by the IRS, raising awareness to protect taxpayers and tax professionals from these schemes.
Charitable remainder trusts are an irrevocable trust benefiting two interests: the beneficiaries and a charity. When structured and administered properly, they can be an excellent tax planning tool. The trust works by donating assets to the trust, receiving a tax deduction based on a formula, and providing beneficiaries with a set payout each year. Once the term ends, or beneficiaries pass away, the remainder goes to the charity.
Injunctions have been obtained against hundreds of tax return preparers and tax fraud promoters by the Department of Justice Tax Division. A list of enjoined individuals and businesses can be found on their website. If you suspect an enjoined person or business is violating an injunction, the Tax Division asks that you contact them with details. It is crucial to be cautious of schemes that sound too good to be true as they can lead to legal and financial consequences.
